Cryptocurrencies benefited from exponential growth during 2021, passing from a niche investment space to an asset class due to ongoing inflation worldwide. In the last two years, the pandemic has brought us to the peaks of a financial crisis. Experts have done all that was possible to keep the economy above the wave — one of the economic decisions being excessive money printing.
Although at the moment the effects were beneficial, they now represent one of the main reasons we confront significant inflation, like 10% in Romania, 8% in the United States, and 16% in Turkey. Moreover, cryptocurrencies have proven themselves a better alternative in countries prone to hyperinflation and political turbulence, like Zimbabwe, Argentina, and Venezuela, over the last decade.
Hyperinflation from Venezuala and Zimbabwe reminds us how fragile FIAT money is sometimes. There are many reasons for currencies to decrease their value, but generally, it happens because of health crises, political instability, and excessive money printing.
In a questionnaire from 2021, 30,000 adults from 20 countries were asked about their reason to hold or trade cryptocurrencies and general attitudes regarding the crypto space and the barriers they observe. In addition, the report offers general data about global adoption in 2021. Some of the most exciting news is:
- 41% of the cryptocurrency holders worldwide have bought digital assets for the first time in 2021.
- Gender discrepancies tend to disappear, with 47% of holders being women.
- And the main reason to invest in cryptocurrencies was inflation, regardless of whether the respondents were from affected or developed countries.
Respondents from countries where the national currency was devalued by 50% or even more against the American Dollar in the last ten years have declared five times more that they want to buy cryptocurrencies in the next year than respondents from countries that are stable politically and economically, like South Africa, Mexico, India, and Brazil.
Even in the United States, two out of five cryptocurrency holders have considered digital assets an alternative to FIAT currency because of inflation. On the other hand, in countries with a strong currency against the American Dollar, like Norway and Denmark, it’s less probable for people to invest in cryptocurrencies — only 3% and 4%.
At the same time, in countries where inflation exceeded 50% and 200%, like India and Brazil, half of the respondents answered positively.
Cryptocurrencies — The future of finance?
Not only respondents from countries with a weak economy have declared that they’re more interested in adopting digital assets, but at the same time, they think that this is the future of money and finance: 59% of people from Latin America have shared this opinions, while 58% from Africa said the same thing — countries where people have experienced hyperinflation over a more extended period.
On the other hand, only 18% of European respondents have declared the same optimism. Given the deflationary nature of Bitcoin, which constantly grows over more prolonged periods since it’s the leading digital asset in this space, the crypto community expects only good things from it over the long term. Moreover, political events and supply shortages do not influence cryptocurrencies, so they’re not as vulnerable as other asset classes and investments, even in unstable countries.
Even if it may take a while for governments to accept cryptocurrencies as a viable alternative, many countries work with digital projections of their traditional currency, trying to combine the centralized structure of an economy with the advantages of Blockchain technology: CBDCs or digital currencies issued by central banks.
At IXFI, we believe decentralization is the future of the economy, so we strongly encourage holding digital assets in a safe and reliable wallet. Take your trading to the next level with Your Friendly Crypto Exchange and enjoy the possibilities. Create an IXFI account with no hassle or regrets.
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